SBAC
SBA Communications Corporation
$205.57
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Strong
·
Conviction
Undervalued
Trading 51.6% below fair value
You pay
$205.57
Bear
$345.77
Fair
$424.35
Bull
$502.94
Bear
$345.77
+68.2%
$14.43 FFO × 29x
Fair
$424.35
+106.4%
$14.43 FFO × 35x
Bull
$502.94
+144.7%
$14.43 FFO × 42x
Key Value Driver
FFO/share ($14.43) × specialty P/FFO multiple
Implied Market Multiple
14.2x
Summary
Our base-case estimate uses P/FFO × Specialty REIT Multiple. We then blend that result with the average analyst price target of $233.00 from 42 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $424.35 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Wall Street's average price target is $233.00 (from 42 analysts). Our estimate is 117% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify